Don't Start A Company Immediately After Graduating College
7 Better Things To Do Instead
☀️ Welcome to the 21st edition of Louis’ Learnings ☀️
I hope the week is off to a fantastic start for you!
Last week I summarized the biggest wins, losses, and lessons from a year of podcasting. This week, I share why I think young aspiring entrepreneurs should NOT start companies and, crucially, what they should do instead.
Heads up! I’m taking this next week (April 12th) off from Louis’ Learnings. I have a few school projects I need to devote my time to. I’ll be back on Monday, April 19th.
Onto the newsletter.
New Here?
Disclaimer
I’m speaking from very limited experience. My advice is purely hypothetical.
Make life decisions based on my musings at your own risk (as should always be assumed for blogs written by 21-year olds).
Don’t Start a Company
Graduating So Soon?
As an aspiring entrepreneur about to graduate college, the natural next step would be to start my own company, right?
Despite the simplicity and romanticism of that path, I’ve come to the conclusion it’s actually a bad idea for four reasons.
A solution in search of a problem: If you start a company for the sake of starting one, more than likely you’ll end up creating what you want to create— not what the market wants (and is willing to pay for).
Short Runways: Fresh out of school, you presumably don’t have baskets of cash. You’ll need money to live off of before the seeds of your business can blossom.
Lack of skills: School teaches you how to do school, not how to run a business. Unless you’ve deliberately acquired skills, you’ll have some serious learning to do.
Fear about plan B: If you’ve never learned how to generate income, you’ll be in fear that your business has to succeed otherwise you’ll starve and die. It’s good for your confidence & sanity to have had a job/freelance and know you’d be capable of generating income if it ever came down to it.
In The Interim — 7 Ideas for What To Do Instead
Rather than starting a business and hoping it works, I suggest considering the following. Each leads to acquiring skills or assets that will make you more likely to succeed as an entrepreneur if and when you have an idea that addresses a specific problem that people are willing to pay to have solved.
1—Learn To Sell: Copywriting, Sales, Marketing, or Lead Gen
All businesses can be reduced to two essential parts: sales and fulfillment. Let’s break this down.
Sales: Generate demand for some offer.
Fulfillment: Deliver the offer upon purchase.
Fulfillment consists of providing specialized knowledge as a service and/or distributing assets. Specialized knowledge includes cutting hair, giving massages, making websites, or cooking a perfect ribeye. Distributing assets includes renting hotel rooms, selling physical products, or selling adspace.
If you hire the right technicians, fulfillment can be very simple. Your chef makes a fantastic meal. Your co-packer manufactures a great product. The bottleneck then becomes generating demand.
According to Justin Mares in Traction “Most startups don’t fail because they can’t build a product. Most startups fail because they can’t get traction.”
No matter how brilliant the offer is, a business fails without customers.
When you start a business before learning sales, you leave too much to chance. You’ll either need to develop something so incredible that it generates organic attention (extremely rare) or rely on someone else to do all of the demand generation.
Avoid this precarious position. Learn sales and you become an asset to every business.
2—Join an entrepreneurial company
Many aspiring entrepreneurs wrongly view getting a job as failure.
This is silly. In my opinion, the only way to fail as an entrepreneur is to give up on the dream of eventually being one.
There are MANY jobs that are highly conducive to entrepreneurship. Many companies foster an entrepreneurial culture. They want you to take initiative, have a sense of ownership for your projects, and often will reward you based on performance.
If you find the right company, this is a pretty great arrangment. You are paid to learn. You are paid to make mistakes with other people’s money. You have an income and can hopefully save a chunk to extend your future runway.
An entrepreneurial company will also attract likeminded people. This could be a great place to meet potential cofounders and be surrounded by positive influences.
3—Join a Rocketship Industry and/or Rocket Ship Company
Think about joining Facebook in the first 100 employees or joining Tesla 10 years ago.
Joining a Rocketship is fundamentally different from “joining a startup.” My podcast (while very awesome) is a “startup”. So are Maven and RoamResearch.
In my view, a Rocketship company has to pass a few basic hurdles such as
It is extremely doubtful that the company won’t be around 5-10 years from now.
People at the company have started successful ventures in the past.
The company has some degree of recurring revenue.
The company has an obvious path to scale 10-10,000x
Google “fastest growing companies” and see what resonates. Peruse AngelList, ProductHunt, HackerNews, GrowJo, and other forums that discuss hot, post-traction startups.
Some examples: Notion, Coinbase, BlockFi, Figma, or StockX.
Often these rocketship companies end up having alumni network effects down the line. The Paypal Mafia is the most prominent example of this.
If you don’t have a specific startup in mind, joining a growing industry is also worth considering. Generally speaking, opportunities for innovation and advancement may be faster and more lucrative than in a stagnant, old-world industry.
Some examples that come to mind: clean energy, crypto/ decentralized finance, sustainability, fintech, construction, VR, e-commerce, biotech, and cannabis.
4—Be an Apprentice to a 5-10 Year Mentor
Entrepreneurship doesn’t have a clearly articulated skillset the same way that engineering and medicine do. Because of this, apprenticeships are a great way to start out and learn the next best thing to the illusory entrepreneurial curriculum.
Who is someone doing work you admire? Is there someone in a position you’d like to one day occupy? Reach out and try to find a way to learn from and work with them.
As bold as that sounds, it’s often the only way to get a foot in the door because entrepreneurial apprenticeships are rarely listed on traditional job boards. For that reason, these typically require some chutzpah and self-selling. Read the Third Door and go for it.
Be warned, these positions often require delayed gratification as you’ll often work for free or near minimum wage. That being said, always seek to add more value than you receive. With the right mentor, the pay-offs work out in the long-run.
Finally, the value of apprenticeships are nonlinear and therefore difficult to quantify. To remedy this, think via contradiction: if you spent 8 hours a day with Elon Musk for 2 years, do you think you’d struggle to find worthwhile business opportunities?
5—Freelance/ Start a Whitelabed Agency
This option addresses all of the criteria I listed in the “why not to start a business section”. As a freelancer, you make an income, learn sales AND useful skills on the fulfillment end, form relationships with business owners and key decision makers, solve problems, add value, and develop economic survival confidence.
Freelancing also carries a great deal of flexibility. This is great if you are stubborn and want to start your business right away. Since you ultimately decide when and how much you work, you can more easily accommodate a side-hustle than someone with a full-time job. For instance, if you command high enough rates, you may be able to do a 25/25 work split whereas the corporate route hypothetically limits you to 40/10.
If you go the freelancer route, you’ll learn the actual skills such as graphic design, web development, audio/video, or writing.
If you go the agency route, you’ll learn everything except the skill of delivering the service, but you’ll pick up skills in management and delegation.
6—Do a Personal Networking Challenge
This can be done in conjunction with any of these other items.
If you got coffee with 3 different business leaders in your community every week, would you struggle to “have a network”?
If you did 20 cold calls/emails a day, would you struggle to find leads?
If you forced yourself to get a new person’s phone number everyday, would you struggle to find dates?
I shared this aphorism last week and I’ll share it again, take a simple idea and take it seriously.
Don’t underestimate the power of simple actions executed with incredible consistency.
My podcast is my “personal networking challenge.” Every week I interview at least one awesome entrepreneur, author, or investor. It doesn’t take a ton of time and the learning and relationship benefits are well-worth it.
7—Start Your Own Thing But Not For Its Own Sake
Last but not least, ignore everything I just said.
If your business idea solves a clearly identified problem, actually consider starting it.
Aura, the energy sports drink company I work with, falls into this category.
Our product was formed to address existing painpoints:
The obscene caffeine levels in most sports drinks—200-300 mg is overkill.
The oversweetening of most sports drinks—30gs of sugar is overkill.
The inconvenience of powdered HBCD—it is a powerful endurance boost, but bland and inaccessible to most people on its own.
In cases like this, don’t think about what you are doing as “starting a business.” Instead, think about it as solving a problem. It is merely a coincidence that a business is the proper economic entity to facilitate and benefit from solving that problem.
That being said, don’t expect the challenges of starting a business to magically disappear even if you have a “product-market fit”.
Using terminology from my friend Joe Wehbe, endeavor to be a constant student when starting any business. View the endless learning and challenges ahead of you as a gift, not a burden.
That’s The List!
I’d love to get your feedback. Do you agree? Disagree violently?
Did I change the course of your life or bore you to tears?
Either way, I’d love to hear from you.
Five Honorable Mentions
Learn an unambiguously useful skill (Excel, Data Analytics, Coding)
Buy Bitcoin (it’s going to the moon, haven’t you heard?)
Dabble with making your own content (YouTube, Podcasts, Writing, Art)
Complete a Fitness Challenge—develop self-confidence & improve your health
Make 1$ online, then think about how you could replicate/ scale the same process
Links Links Links
My Content Updates 🎧
LK Podcast #61 with Khe Hy: After 15 years on Wall Street, Khe quit the corporate world to teach about productivity, existentialism, and increasing your personal leverage.
LK Podcast #60 Louis and Kyle: We interview each other about what we learned from one year of podcasting.
LK Podcast #59 with Blog of Jake: Jake, an anonymous blogger, joins us to discuss the future of crypto, longevity, and cities.
LK Content Coming Soon 📅
Andy from DeFi Slate (great blog about DeFi)
Self-storage investor, AJ Osborn
Ryan Robinson from RyRob.com (300k monthly readers)
Steph Smith from Trends (newsletter from The Hustle)
Quick Clicks
(1) 📚 Damn Good Listen 📚 : 12 Rules for Life by Dr. Jordan B. Peterson
Not overrated, not even a little bit.
I’m going to use my sphere of influence to amplify Dr. J’s voice as much as I can.
(2) 🧠 For The Mind 🧠 : Visualize Value New Tab Chrome Extension
Great mindset reminders every time you open a new tab in Google Chrome.
That’s all for this week
Focus on the good in the world,
Louis
Photo of the week - Fun at F45
At the insistence of my friend Ali, I’ve been doing a 1-week trial of F45, a fast-paced group-fitness class that combines strength and cardio.
I forgot to take photos at F45, so here’s a selfie of me writing this newsletter.
The pink drink is Fortagen, Dr. Jaquish’s vegan (but not plant-based) protein powder.
Relating back to #6... I try to talk to at least 3 strangers a day! It's really helped me shake the social anxiety from being in quarantine for a year and it's given me some really great new friends! I find the more strangers I talk to, the easier it is to strike up a conversation or find a commonality with someone. Networking is simply human connection!